July 11, 2012

Mr. David A. Stawick Secretary Commodity Futures Trading Commission Three Lafayette Centre 1155 21st Street, N.W. Washington, D.C. 20581

RE:

Rules Prohibiting the Aggregation of Orders To Satisfy Minimum Block Sizes or Cap Size Requirements, and Establishing Eligibility Requirements for Parties to Block Trades RIN 3038-AD84

Dear Mr. Stawick: OneChicago, LLC (OCX) appreciates the opportunity to comment on the Commodity Futures Trading Commissions (CFTC or Commission) Notice of Proposed Rulemaking that was published in the Federal Register on June 27, 2012 regarding the aggregation of swap block orders and establishing eligibility requirements for swap block trade participants. OCX is the only domestic security futures exchange; we provide a marketplace for trading over 2,800 futures on more than 1,500 individual equities and ETFs. Security futures were authorized by the Commodity Futures Modernization Act of 2000 which placed security futures under the joint regulation of the CFTC and the Securities and Exchange Commission (SEC). We applaud the Commission for taking steps to construct like regulatory environments for like products. Similar to already established and enforced OCX rules regarding single stock future block transactions, swap block rules should limit swap blocks to only larger more sophisticated participants similar to Eligible Contracts Participants. OCXs Exchange Future for Physical (EFP) is the economic equivalent of OTC equity swaps, specifically stock loan/borrow and equity repo transactions.1 Our experience is that our customers routinely compare trading environment including regulatory friction, ease of access, execution quality and transaction/regulatory costs between the regulated and unregulated marketplace and transact in the most favorable market at the time. Looking forward, we are acutely concerned that the OTC swaps, mandated to move to a SEF or exchange, be subject to same regulatory requirements as
1

In these OTC transactions, there is a transfer of stock for cash between the two parties governed by an International Swaps and Derivatives Association (ISDA) agreement, a legally binding contract. There is the same transfer of stock for cash between the two parties to an OCX EFP trade, the legally binding agreement being the single stock future.
_________________________________________________________________________________________________ 141 W. Jackson Blvd. Suite 1065 Chicago, IL 60604 tel 312.424.8500 fax 312.424.8529 www.OneChicago.com

our single stock futures; otherwise, we will be at a disadvantage. Consequently, we encourage the Commission to continue building a like regulatory environment for swaps. In that vein, we offer the OCX rulebook as a model. We also encourage the Commission to work with the SEC, the Financial Industry Regulatory Authority, and the National Futures Association to harmonize regulatory fees between similar transactions. OTC equity swaps frequently involve the transfer of the stock leg between the swap parties, yet they pay no regulatory fee while there are regulatory fee imposed on both legs of the EFP. As these transactions come onto exchanges and into clearing houses, the Commission should be careful not to create a regulatory fee structure that advantages one product over another. To be clear, all financial transactions should equally pay for regulation. Conclusion OneChicago thanks the Commission for the opportunity to comment on this subject. We would be happy to discuss any related issues with CFTC staff. If you have any questions, please do not hesitate to contact me at (312) 424-8512 or via email at tmccabe@onechicago.com Sincerely,

Thomas G McCabe Chief Operating Officer

Cc:

David Downey, Chief Executive Officer, OneChicago